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Traditional Values. Innovative Care.

Healthcare Reform – A Therapy Perspective

Posted: 2/17/14
Darrell Metcalf

It is a widely held tenant of planning that as organizations we generally overestimate the amount of change that will occur within the next four years, and we underestimate the amount of change in our business/industry over the next 10. When evaluating significant changes like the Affordable Care Act, a.k.a. Healthcare Reform, I try to keep this maxim in the back of mind and focus on the secular changes rather than the rhetoric.

The one benefit of aging gracefully is that sometimes you get to experience the same trends one, two or three times in your lifetime. Many of the ideas of Healthcare Reform aren’t all that new – payments based on population health rather than individual patient treatments, integration of the continuum of healthcare versus a silo-based specialty approach, improving access and driving patients away from high-cost healthcare access points (e.g. ER), and emphasis on primary care (prevention) versus specialty care (reaction). The difference I see in implementation of these ideas this time is the development of a Big Data approach by the government in being able to track and monitor activity not just in the rear view mirror 3-12 months down the line but real time and sometimes prospectively.

Okay, Mr. Generalist buzzword talker but what exactly does that mean for the therapy market specifically?

First, costs are a huge part of what drove the passage of healthcare reform and costs are how success will be measured. Therapy has been operating for quite some time in a high productivity landscape with some of our competitors requiring 90 percent productivity. That trend will not abate. The several things that will drive this moving forward are (1) point of service documentation; (2) increased pressure to integrate and utilize PTAs and COTAs for the majority of treatments/visits other than evaluations and high-acuity/specialized cases; and (3) emphasis on program development not tied directly to the medical reimbursement complex.

Second, the government has data and benchmarks that you are being measured against. You better (a) know what those benchmarks and measurements are and (b) measure yourself in the same manner and modify your treatment or have solid clinical documentation regarding why you are “different.” When I say clinical documentation, I don’t mean just your notes and medical diagnosis, I mean the research-based, outcome-supported protocol you are using that throws you out of the norm. Hospitals, SNFs and all other institutional medical providers are now receiving PEPPER reports that benchmark them against other providers. If you are outside the norm and remain consistently so, count on an audit and be prepared.

Third, you are going to have to get out of the silo mentality while staying in your silo. What I mean by that is while the trend is there for a post-acute bundle and there are test markets that are attempting to develop the methodology that still isn’t the way institutions are reimbursed today. They (Payors) are dabbling around the edges with bonus payments and readmission penalties but as of today outpatient is reimbursed primarily via Physician Fee Schedule, inpatient is DRG, Home Health is 60-day episodic payments and skilled nursing is RUG. Going back to my first point above, as institutions prepare for Accountable Care Organizations, what you are seeing are discharges being pushed to the lowest cost alternative. On the margins, patients who previously would have gone to a SNF are being pushed to HH, and HH admits are being pushed to outpatient in an effort to reduce the overall costs of care. As a result, while you may currently be a therapist in one of the silos (inpatient, SNF, HH, outpatient) you need to be aware of how the caseload is moving around you. You may not be seeing the same quantity of total knees and hips in your SNF because they are bypassing the SNF venue and going directly to HH and outpatient.

Finally, patient treatment is rapidly moving from art to science. More physicians are abandoning independent individual/group practice and aligning with hospitals. Institutions succeed because they are able to standardize practice methods and gain scale. G-codes aren’t just another painful documentation edict. Big Data will dictate that what is collected will be used so once the data is in place to say “this diagnosis should result in X visits with Y cost.” You can bet that your practice methods may be broadly dictated rather than chosen.

As a parting thought, I return to my opening comment about four versus 10-year horizons – while four years is unrealistic, I would watch the 10-year horizon for the incursion of telemedicine into therapy provision particularly in rural markets. Critical Access Hospitals are already in the government and the Obama administrations’ sites, with them looking at reverting to the original CAH qualification criteria, whether or not anything will happen on that front, as the efficacy of telemedicine is developed and proven there is nothing to keep you from staring at a television monitor and bouncing from reviewing a patient’s gait in Dillingham, Alaska to a patient’s shoulder ROM in Yuma, Colorado while directing PTAs in those locations. Maybe 1984 was a little ambitious by Mr. Orwell – 2024?

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Comments

  1. Rowena Clark

    First, I want to say I appreciate you sharing your insight in the future of our industry. I do have a question about the 3rd point, emphasis on program development not tied directly to reimbursement complex. Could you provide me with more examples or details about what that might be.

    I and members of the Wesley Towers team reviewed this and are beginning further discussions about program development. We desire to address the needs in our community and to be and leader in provision of services.

    thank you.

  2. Rick J Leinen

    Darrell, good article and I appreciate Rick sending it to me. You give a good perspective on some items that are “one of many” we are contemplating during our long range strategic planning sessions. Forecasting these days have transitioned from 10 years to 10 minutes it seems like… Thanks again and take care.

  3. Mike Myers

    Darrell,
    Nicely written article. Times are a changing and the challenge for all of us is how to keep the patient at the top of our priority list while adapting to all of the changes.

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